Victorias September 2021 earthquake generated the third highest number of insurance claims in the last 12 months after COVID-19 and the floods in southeastern Queensland and New South Wales, according to the Australian Financial Complaints Authority (AFCA).
Key points:
- On September 22, a magnitude 5.9 earthquake struck near the regional Victorian town of Mansfield
- The quake could be felt in many southern capitals, and building damage led to thousands of insurance claims
- The Economic Complaints Authority says there have been hundreds of complaints about claims handling
As of June 22, the AFCA had received more than 350 complaints related to the 5.9 magnitude earthquake in Mansfield.
This compares with more than 3,700 complaints about COVID and nearly 400 floods.
Financial Rights Legal Service Acting Director Jane Foley believes the true number of people who are dissatisfied with the outcome of their earthquake insurance claims can be much higher.
“People are getting frustrated with the case process,” Ms Foley said.
Millions of dollars in damage caused
In total, there have been more than 16,000 insurance claims related to the earthquake worth approximately $ 120 million, according to the Insurance Council of Australia.
The AFCA said most complaints were related to home insurance, with about 60 percent due to a claim that was denied due to a policy exclusion or condition.
Other complaints were due to delays, refusal of claims for other reasons or disagreements about the size of the claim.
“The insurance company may think it’s not earthquake damage, but is due to other factors – for example, the damage is already existing damage, or the property is too far from the epicenter of the earthquake for it to be the cause,” the AFCA said. senior insurance ombudsman Emma Curtis said.
The Complaints Authority has already closed more than 120 complaints, which has resulted in insurance companies paying customers close to $ 300,000.
The AFCA says policyholders who disagree with the outcome of an insurance claim should file a complaint with their insurance company.
If the problem is not resolved within 30 days, or a complainant disagrees with the result, they can register the complaint to AFCA.
The cause of the injury is difficult to prove
The Financial Rights Legal Center said they had received a large number of calls about the Victorian quake.
Ms Foley said earthquake claims could be difficult to assess because it was difficult to determine when a crack occurred and what caused it.
“The obligation is on the policyholder to prove that they have experienced losses caused by an insurance event,” she said.
“Therefore, I would usually recommend getting your own proof so you need an expert.
For more information on your rights, Ms. Foley recommends looking at theirs guidance on earthquake requirements or the general insurance code.
